Hansard Daily: Legislative Council - Tuesday, March 8 2016

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Planning, Development and Infrastructure Bill

Committee Stage

In committee.

(Continued from 25 February 2016.)

Clauses 129 to 132 passed.

Clause 133.

The Hon. K.J. MAHER: I move:

Amendment No 41 [Emp–4]—

Page 116, line 12—Delete 'relevant authority' and substitute 'person undertaking the development'

The Hon. D.W. RIDGWAY: I am just trying to read the explanation the government has given. Can the minister explain what the effect of this amendment is, just to refresh me and start me off on the bill again.

The Hon. K.J. MAHER: I thank the honourable member for his question on this amendment. I can advise that this amendment and amendments Nos 42 and 43 have been prepared in response to questions raised in the other place and feedback provided by the Local Government Association.

The LGA has pointed out that the notification of a neighbouring landowner in relation to impending activities that could affect stability of land and premises should be the responsibility of the person undertaking the development rather than the relevant authority responsible for determining development authorisation. The government agrees with this point of view and has therefore amended clause 133 accordingly.

The Hon. D.W. RIDGWAY: I am happy to support the amendment.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 42 [Emp–4]—

Page 116, line 14—Delete 'a person' and substitute 'the person'

Amendment No 43 [Emp–4]—

Page 116, line 17—Delete 'a person' and substitute 'the person'

I move amendments Nos 42 and 43 for the same reasons as amendment No. 41.

Amendments carried.

The Hon. K.J. MAHER: I move:

Amendment No 44 [Emp–4]—

Page 116, line 22—Delete 'a person' and substitute 'the person'

It is a minor amendment in relation to a technical drafting issue, replacing 'a person' with 'the person'.

Amendment carried; clause as amended passed.

Clause 134.

The Hon. K.J. MAHER: I move:

Amendment No 45 [Emp–4]—

Page 117, lines 28 and 29—

Delete 'the council for the area in which the adjoining allotment is situated' and substitute 'the Court'

Amendment No 46 [Emp–4]—

Page 117, line 30—Delete 'a council' and substitute 'the Court'

Amendment No 47 [Emp–4]—

Page 117, lines 33 to 36—Delete subclauses (6) and (7)

Amendment No 48 [Emp–4]—

Page 118, line 2—Delete 'a council' and substitute 'the Court'

Amendment No 49 [Emp–4]—

Page 118, line 5—Delete 'a council' and substitute 'the Court'

This is a set of amendments. The Local Government Association and members in the other place have requested that, rather than involving the council in a potential dispute regarding access to neighbouring land, this should remain a civil matter. This would be more in keeping with the Fences Act, which enables the court to mediate on disputes between neighbours rather than making such disputes administrative matters for councils to approve.

This clause includes existing powers of entry under section 63 of the Development Act. There are already rights to access neighbouring land for the purposes of building work which affects the stability of adjacent land (per clause 133 as discussed) or for party walls. This provision expands those to include other building work adjacent to boundaries. The clause requires a notification agreement of an adjoining landowner, in the absence of which the clause for the applicant to pursue gaining access as a civil matter. Neither an adjoining landowner nor the court is forced to agree to a request that is not reasonable.

Amendments carried.

The Hon. M.C. PARNELL: I move:

Amendment No 93 [Parnell–1]—

Page 118, line 10—Delete 'or damage' and substitute ', damage or inconvenience'

This is a very simple amendment, but I need to put it into context. The section we are talking about is where your next-door neighbour needs access to your property in order to undertake their building work.

An example might be where they are building a wall on the boundary and, in order to erect the scaffolding and construct the wall, they need to occupy your driveway. They might be occupying it for some period of time; maybe they need to demolish your garden. Subclause (12) says that if someone exercises their power to enter neighbouring land, then they are:

…liable to pay reasonable compensation [to their neighbour] on account of any loss or damage caused by the exercise of the power.

That sort of makes sense. If the neighbour destroys your garden, they need to reinstate it, or they need to pay you money so that you can go and get someone to reinstate it. It all makes sense. The example that I thought might not be caught within this section, and why I am seeking this amendment, is if, for example, you live on a busy main road and you have a driveway where you park your car.

If your driveway is out of action for a period of time because your neighbour has got it full of scaffolding, then you may have to park your car 100 metres away. If it is a busy road you probably cannot park it on the road at the front and you might have to go down a side street; you might have a 100 metre walk with your shopping every time you come back from the supermarket. When the words in legislation talk about 'loss or damage', there is a tendency for courts to interpret those words as being economic loss or damage. I am seeking to add the word 'inconvenience', because it would be inconvenient not to be able to park in your driveway for several months while it was full of scaffolding.

In the normal course of events, the way these things pan out is that the neighbour who is doing the building goes next door with a carton of beer or with a bunch of flowers or whatever it might be. Most of these things are sorted out in a reasonable manner, but if they are not, if you have someone who is seriously inconvenienced for a considerable period of time, I think it would be unfair for them not to be able to get at least some sort of compensation. Including the words 'or inconvenience' with the words 'loss and damage' covers that situation.

It would be very rare for these matters to go to court for a dispute to be resolved, but if it were to go to court I would want to be very clear that a person who suffers that inconvenience would be eligible for something; even if it has not cost them anything financially, or it is not as if they have had to rent a garage space somewhere else, they have just been put to great inconvenience.

The Hon. K.J. MAHER: The government opposes this amendment. Providing a statutory means whereby a person can be compensated for the inconvenience of someone gaining access to neighbouring land, subject to the notification requirements set out in clause 134, in order to legally undertake a development, would quite possibly lead to an unworkable situation.

As stated earlier, the provision does not force access upon the adjoining owner and makes provision if any damage is done inadvertently. If the request for access made is not reasonable, the adjoining owner may refuse and the applicant would need to take the matter before the court to determine it. It is possible that this amendment could lead to a larger number of unwarranted claims for compensation, all of which would have the potential to end up in the court system.

The Hon. D.W. RIDGWAY: I can indicate that the opposition will not be supporting the honourable member's amendment. The minister outlined that if a landowner refused the right for someone to come onto their property because there would be a significant inconvenience, it may well go to court and that inconvenience would be dealt with in that process. If they have to park a few hundred metres down the road or, as the honourable member said, perhaps even rent a car park space somewhere else, all of that should be taken into account. The opposition agrees with the government. We think the legislation as drafted, which details any loss or damage which is measurable against how you determine the dollar value, is adequate as it is.

Amendment negatived; clause as amended passed.

Clause 135 passed.

Clause 136.

The Hon. M.C. PARNELL: I have a question in relation to this clause, which is completion of work. The way the current regime works, and the way this new regime is proposed to work as well, is that when you get your development approval you are supposed to start work within a certain period of time and you are supposed to finish work within a certain period of time. I think at present you are supposed to start within a year and finish within three years, and you can get a grant of an extension; you just go back to the council and say, 'Look, circumstances beyond my control, the weather has been wet, I can't start yet', or, just as common, is someone who has not been able to finish.

The clause as drafted makes sense: you do not want unfinished buildings littering the landscape, you have to have some mechanism for the authorities to be able to either force completion or to remove. My question is: is there any limitation on how many extensions a person can be granted to finish a development? In other words, they have their approval, they have not finished it within let's say it is three years (I understand the date is to be set out in regulations): is there any limitation on how many times they can go back seeking an extension of time to finish the development?

The Hon. K.J. MAHER: I am advised that this clause represents no change from the existing Development Act, section 56, to which the honourable member has alluded, and there is not a number of times one can apply—that is up to the authority to determine.

The Hon. M.C. PARNELL: I thank the minister for the answer. I expected that that was the answer. What prompted my question was that, in I think the very first court case that the Environmental Defenders Office conducted back in about 1996 (I did not conduct the case, a colleague did), they had a gotcha moment, where a house was half legal and half illegal, in other words, part of the house was not built according to the act. I think the time limit had expired, it had not been extended, or something like that, and the court refused to exercise the wisdom of Solomon and say, 'Well, the front half of the house is legal, the back half is illegal, so knock down the back half,' so they got to keep it all.

I thought I would just pose the question because it is something that does cause consternation in the suburbs when people have substantially completed, but it is still unfinished, it is still ugly and neighbours are often frustrated that the developer just keeps going back to the council and saying, 'I still haven't got any money, grandma is going to die soon, I'll get an inheritance, that will help me finish the house.' It seems there is no limit. It would be a brave local council to tell someone to knock down a three-quarters finished house—they just are not going to do it.

Ultimately, I think the answer is that, provided you get over the halfway mark and you keep going back to the council, you will get as many years as you need to finally finish your house. I make that as an observation. If, as the minister said, this replicates the current system, it might be something that the government might want to look at in regulations, because it does cause some anxiety in the community.

Clause passed.

Clauses 137 to 153 passed.

Clause 154.

The Hon. M.C. PARNELL: I have a question on this clause. The interaction between the Mining Act and the current Development Act has always been a difficult relationship. In particular, the environmental impact assessment procedures under the Development Act have often been purported to be used for mining operations, but in fact it has not been under any statutory basis. My question is a fairly simple one. Is there any change in clause 154 compared to the current arrangements for certain mining tenements to be referred to the planning minister? Is it any different from the current system?

The Hon. K.J. MAHER: I am advised that the effect represents no change from the existing Development Act, section 75. However, section 75(4a) is deleted. The appropriate authority may refer a designated mining matter to the minister for advice or may be compelled to do so by the regulations. If the operations are of major social, economic or environmental importance, the minister or the authority may determine that the EIS or assessment report process is to be complied with. Disagreements between the authority and the minister over advice relevant to actions taken as a result of the EIS or assessment report will be referred to the Governor to determine whether the authority should adhere to the minister's advice.

Subsection (4a) is no longer required as public environmental reports, to which it refers, will no longer be part of the legislation. They are replaced by an EIS that can be scaled or tailored to the size, complexity or impacts of the proposed development. So, the effect is that there is no change. However, because of that change in the way the new legislation is drafted, there is that change from section 75(4a), but the effect of the way the scheme works does not change.

The Hon. M.C. PARNELL: I will take this on notice if the minister does not have the answer. How many matters per year do get referred to the planning minister under the current Development Act—just a ballpark figure?

The Hon. K.J. MAHER: I can see the shaking of heads. We do not have that information with us. I am happy to take that on notice and undertake to get at least a ballpark figure, if not a very accurate answer, for you as soon as I can.

The Hon. M.C. PARNELL: The other point to note about this clause is that the designated mining matters that can be referred to the minister are effectively limited to extraction. In other words, it says under the definition of 'designated mining matter', 'An application for a mining production tenement'. What you often have, though, is a situation where you have mineral exploration licences that are granted.

My question is: why is there no interaction between the mining regime and the planning regime in environmental and food production areas under the act? You are going to all the trouble of preserving these parts of the state—and I know they are primarily being preserved from housing development—but it seems to me that the food production areas that we have been shown in maps are also largely impacted by mineral exploration licences as well. My question is: why is there no link between the two systems?

The Hon. K.J. MAHER: My advice is that this reflects the current system and that was the intention: to make this as simple as possible to transfer over the existing system. Again, I can take that on notice and bring back an answer.

The Hon. D.W. RIDGWAY: The minister said this reflects the current system. So, effectively there is no change in the government's approach to mining operations in food production areas that are outside the proposed boundary, which has been defeated in this chamber?

The Hon. K.J. MAHER: The EFPA is all about limitation for things like subdivision for residential purposes. It is not aimed at food production areas which, as you point out, was defeated. So it is a bit of a moot question as to how this interacts with something that, in its wisdom the Legislative Council has decided not to support in the bill.

The Hon. D.W. RIDGWAY: I do recognise that the minister from the other place is taking a keen interest in the debate today. It is good to see him here; it has taken almost two months for him to come back, after last December. It is interesting to see that we had the environment and food protection areas that were proposed, and an elevation of rhetoric around how important it is to protect those areas, yet in the rest of the state, where mining is allowed, there is no change in the government's concern or interest in food production areas.

The Hon. K.J. MAHER: I know that mining and heritage matters are to be considered in later separate pieces of legislation.

The Hon. D.W. RIDGWAY: Can the minister explain that mining and other issues are to be considered as a separate piece of legislation. I am interested to know what that bit of legislation is and when we might see it.

The Hon. K.J. MAHER: I do not have information on exactly what will be contained in those or the timing but, again, as I did with the Hon. Mark Parnell, I am happy to ask some questions and bring back answers for the honourable member.

The Hon. M.C. PARNELL: I will just pursue this a little bit further. The test for whether the mining minister has to send something to the planning minister is whether the situation is required by the regulations. My question is: what does the government have in mind in terms of regulations? Is it likely to be regulations that are geographically based—in other words, all mining production tenements in flood plains or in food-growing areas or whatever—or is there some other test that might be applied? If there are no regulations, there is not really any requirement for the mining minister to send anything to the planning minister for advice.

The Hon. K.J. MAHER: My advice is that there is no intention to change from the current status quo.

The Hon. M.C. PARNELL: The current status quo is geographically based. I think there are certain areas of the state that are set out where things have to be referred to the planning minister.

The Hon. K.J. MAHER: Yes, I have lots of nods up and down this time, so I think I can reasonably safely say that I am advised that that is correct.

Clause passed.

Clause 155 passed.

New clauses 155A and 155B.

The Hon. K.J. MAHER: I move:

Amendment No 50 [Emp–4]—

Page 133, after line 31—Insert:

Subdivision A1—Interpretation

155A—Interpretation

(1) In this Division—

basic infrastructure means—

(a) infrastructure within the ambit of paragraph (a), (b) or (h) of the definition of 'essential infrastructure' under section 3(1); or

(b) roads or causeways, bridges or culverts associated with roads; or

(d) embankments, wells, channels, drains, drainage holes or other forms of works or earthworks connected with the provision of infrastructure under a preceding paragraph.

(2) For the purposes of this Division, a designated growth area is an area which is to be developed in 1 or more of the following ways:

(a) by the division of land and the sale (or proposed future sale) of all or some of the resulting allotments;

(b) by rezoning to increase development potential;

Subdivision A2—Establishment of schemes—basic infrastructure

155B—Initiation of scheme

(1) The Minister may initiate a scheme under this Subdivision in relation to the provision of basic infrastructure in, or in connection with, a designated growth area.

(2) A scheme under this Subdivision should be limited to—

(a) the provision of basic infrastructure; and

(b) funding arrangements for the provision of that basic infrastructure,

in 1 or more of the following situations:

(c) the basic infrastructure is reasonably necessary for the purposes of development that is proposed or to be undertaken within the designated growth area (including on account of rezoning that has occurred, or is expected to occur, in relation to the whole or a significant part of the development that is to occur within the designated growth area);

(d) the basic infrastructure will support, service or promote significant development that is proposed or to be undertaken within the designated growth area;

(e) it is reasonably necessary or efficient to co-ordinate the design, construction and funding of basic infrastructure under a scheme because of the scale of—

(i) development that is proposed or to be undertaken within the designated growth area; or

(ii) the basic infrastructure that is to be provided,

(or both).

(3) Subject to subsection (4), a proposal to proceed under this section may be initiated—

(a) on the Minister's own initiative; or

(b) at the request of another person or body interested in the provision or delivery of infrastructure.

(4) The Minister may only act under this section on the advice of the Commission.

(5) The Commission must, in providing advice under this section, take into account any relevant state planning policy and regional plan, and the relevant provisions of the Planning and Design Code (subject to any relevant amendments that might be made in connection with potential or proposed development that is to be undertaken within the designated growth area).

(6) The Minister will initiate a scheme by preparing a draft outline of the scheme that—

(a) provides detailed information about—

(i) the nature and intended scope of the basic infrastructure; and

(ii) any related development that is proposed to be undertaken as part of the scheme; and

(b) identifies the proposed designated growth area; and

(d) assesses the costs and benefits of the scheme; and

(e) outlines a funding arrangement for the scheme, including whether it is proposed to impose a charge under Subdivision 2A; and

(f) provides information about the person or body that will be carrying out the work envisaged by the scheme (to the extent that is known); and

(g) identifies any basic infrastructure or other assets that might be expected to be transferred to another entity when the scheme has been completed; and

(h) provides such other information as the Minister thinks fit after consultation with the Commission.

(7) In giving consideration to the nature and intended scope of basic infrastructure under a scheme, the Minister must seek to facilitate the provision of infrastructure that is—

(a) fit for purpose; and

(b) capable of adaptation as standards or technology change over time (insofar as is reasonably practicable or appropriate in the circumstances); and

(c) capable of augmentation or extension to accommodate growth or changing circumstances over time (insofar as is reasonably practicable or appropriate in the circumstances); and

(d) where appropriate, designed to build capacity for the future, including by allowing for connections, extensions or augmentation by others who are able to leverage off the initial investment in the basic infrastructure; and

(e) designed and built to a standard that is appropriate taking into account the nature and extent of development that is proposed to be undertaken within the relevant designated growth area; and

(f) capable of being procured and delivered in a timely manner to facilitate and promote orderly and economic development.

(8) In giving consideration to the constitution of a designated growth area under subsection (6)(b), consideration must be given to—

(a) the area or areas which will benefit from any basic infrastructure to be provided under the proposed scheme; and

(b) the extent to which it is possible to establish an area that will provide fair and sufficient funds over time with respect to the provision of the basic infrastructure under the proposed scheme; and

(9) In giving consideration to whether or not to include a proposal for the imposition of a charge under Subdivision 2A, the Minister must take into account—

(a) the extent that it is reasonable that other sources of funding be used instead; and

(b) any schemes or arrangements (including with respect to the imposition of separate or other rates or charges) that are already in place, or already planned (and known to the Minister) with respect to the provision of basic infrastructure or the undertaking of works in the designated growth area (or in an adjacent or related area).

(10) The Minister, in preparing the draft outline, must—

(a) take reasonable steps to consult with—

(i) the owners of land within the proposed designated growth area; and

(ii) the person or persons who are intending to undertake any relevant development within the proposed designated growth area; and

(b) take reasonable steps to consult with the council within whose area the proposed designated growth area is situated,

and may consult with any other person or body as the Minister thinks fit.

(11) The Minister will then publish the draft outline—

(a) in the Gazette; and

(b) on the SA planning portal.

(12) In addition, the Minister must, as soon as is reasonably practicable after acting under this section on the advice of the Commission, publish the advice on the SA planning portal subject to any qualifications or redactions that apply under section 53 or under a practice direction published by the Commission for the purposes of this provision.

(13) The Minister will then (at a time determined by the Minister) refer the proposed scheme to the Chief Executive for the appointment of a scheme coordinator.

These clauses have been inserted following discussions with industry and define two important concepts which are central to this part. The first concept is to define basic infrastructure as a subset of a central infrastructure as defined in clause 3. This distinction has been made to differentiate between the types of civic infrastructure, such as roads, causeways, bridges, culverts, drains and stormwater management infrastructure, which must be provided by a developer as part of an infrastructure scheme as distinct from civil infrastructure, which may be provided only by agreement.

Secondly, the designated growth area is an area to be developed as part of a basic infrastructure scheme through the division of land and sale rezoning to increase development potential or undertaking urban infill consolidation or renewal. It might be worth getting on the record now some remarks about the infrastructure scheme in new clause 155A that may answer some of the questions I am sure the honourable members will have.

Fundamentally, the first question is: why do we need infrastructure schemes in South Australia? One of the most common complaints communities have about our planning system is that the delivery of important infrastructure is out of step with the pace of the development. This can, and often does, result in funding bottlenecks that leave new home owners stranded without some of the services they are entitled to expect or slow the upgrade of public grounds, such as streetscapes, to match and add value to any new development.

The basic infrastructure schemes will ensure that infrastructure is factored in from the outset and then delivered so that home owners have the basic infrastructure they need and when they need it. Infrastructure needs will be identified and costs calculated and locked in before a development can begin.

The state government, industry and Local Government Association have worked together to finalise the legislative framework for the basic infrastructure scheme to deliver a better, fairer way forward. The resulting basic infrastructure scheme will do away with the current inefficient inequitable practice whereby infrastructure instruments are individually negotiated without coordination between landowners within a growth precinct and developers by way of cumbersome legal deeds.

Indeed, the Property Council of Australia and the Urban Development Institute of Australia (SA) were united in a statement on 8 February 2016 in support of the revised infrastructure provisions, when they said:

Calling for support for a sensible infrastructure scheme that enables new development and deals with the historic gridlock we have seen around getting agreement around new housing developments.

This gridlock can result, and has resulted, if we take Mount Barker as an example, in Swiss cheese zoning, where some pockets within a precinct are rezoned and others are not and cannot be rezoned until deeds have been signed. Contrary to some commentary, developers are already required as part of the rezoning process to build the roads, streets and provide the electricity, gas, water, sewerage, communications and stormwater infrastructure required in new developments.

The basic scheme will provide certainty and transparency around infrastructure funding arrangements not only for first home buyers but also for industry, landowners and local government. Importantly, an existing landowner will only be required to pay when they choose to subdivide their land and therefore take advantage as a developer of any such basic infrastructure set-up. In addition, this bill creates a general infrastructure scheme which will operate as a value capture tool and share the cost of new infrastructure between those who gain direct benefit and who have agreed to subsidise the scheme.

The bill also provides parliamentary scrutiny over both who may fall within a relevant value capture area and how much any such general infrastructure should reasonably cost. The general scheme would make this state one of the first in Australia to provide a legislative mechanism for value capture. This has the potential to unlock opportunities for South Australia to access federal government infrastructure funding, potentially bringing forward development and infrastructure that can benefit members of the community.

On 16 February this year, the federal government launched the Australian Infrastructure Plan indicating, amongst other things, at recommendation 5.10 of the plan, that the federal government is looking for such value capture schemes. As our state changes and grows, the need to replace and build new infrastructure will increase. We cannot just keep raising taxes across the board to fund infrastructure from general revenue. Moreover, this general infrastructure scheme is about providing those who want to replace and build new infrastructure to have a workable mechanism to achieve this.

Importantly, this scheme requires 100 per cent consent to operate. Other governments in Australia, Europe and America have also accepted that new mechanisms and sources of funding must be found if we are to meet the growing demands for infrastructure. The principle is that those few who gained directly from the amenity and financial lift created by taxpayer-funded infrastructure should help taxpayers, many of whom will not directly benefit, in paying for it.

The general infrastructure scheme is an innovative planning and financing tool that has great potential to unlock development and bring forward infrastructure investment. It allows the provision of basic as well as other infrastructure, such as public realm improvements. For example, a general infrastructure scheme could be used by a willing developer to upgrade the streetscape surrounding their development or create open spaces for the community, such as Millennium Park, in Chicago, and Bryant Park, in New York, both of which have used value capture mechanisms.

Value capture has been used by the City of Toronto in recent years for the benefit of its citizens and for projects within the public realm such as revitalising an historic building, which was previously used as a public health office, for use by the community as a theatre and live arts hub. Similarly, the redevelopment of six blocks of the Chicago Riverwalk is being funded through value capture. This project is changing the face of the Chicago riverfront and reclaiming the polluted river and industrial site, transforming the area into a series of interconnected spaces which benefit the city, its residents and visitors.

Value capture schemes such as these, and the general infrastructure scheme created by this bill, are based on the fact that we know that improvements in the public realm and the construction of infrastructure will often make an area more attractive for business and residents. In turn, this often leads to an increase in land values, and more economic activity and jobs, making schemes viable and attractive propositions for developers and landowners alike.

The basic infrastructure scheme is a one-off charge to landowners within the designated growth area, which is specified when the scheme is set up, at the time the land is subdivided or work starts on the development. The landowner will not be liable to pay the charges unless they develop their land at or after the time the scheme is put in place. If, for example, a scheme is put in place in a farming area, owners will be free to continue working their land. Their contribution charge will only become payable if the land is subdivided or work starts on the development.

General infrastructure schemes involve a contribution that is supplied to landowners within a specified area or areas—the contribution area—to be paid over a period of time. The requirement for people within a general infrastructure scheme contribution area to make or begin to make contributions will be related to the point at which the benefit will begin or is intended to accrue, and will be triggered by particular events. These could, for example, include the division of the land, a change to the planning and design code such as rezoning, or an approval or the undertaking of the development, which could include the construction of the infrastructure.

However, it must be emphasised that a general infrastructure scheme can only proceed if all—that is, 100 per cent of landowners within the contribution area—agree to participate. Under the general scheme, infrastructure contributions will apply in a similar way to council rates collected over a set period of time. They will only be imposed if all affected landowners agree to the scheme. In some cases, the charge will be able to be deferred until the property is sold or redeveloped.

I urge members to support the entire package of infrastructure schemes as proposed in this bill, which reflect substantial, thoughtful and detailed negotiations with industry groups. In particular, the Urban Development Institute of Australia and the Property Council need to be thanked for their constructive contributions. It is also in line with the Expert Panel on Planning Reform's recommendation No. 17.

The Hon. D.W. RIDGWAY: Minister, you mention, first up, the Property Council and Urban Development Institute. Could you inform the chamber what the views of the Housing Industry Association and the Master Builders Association are in relation to the infrastructure charges? I might just add, if I may, that there are four key industry sector groups in the property sector: the Housing Industry Association, the Master Builders Association, the Property Council and the Urban Development Institute. The minister has mentioned just two of those. I think it would be important to have on the record what the views of the other two are.

The Hon. K.J. MAHER: I am advised that the Housing Industry Association does not support the scheme. I am also advised that the Master Builders Association has not provided additional comments to this new scheme.

The Hon. D.W. RIDGWAY: What consultation has taken place with the Housing Industry Association and the Master Builders Association? Has there been the same level of consultation and interaction as there has been with the other two industry groups?

The Hon. K.J. MAHER: I thank the honourable member for his question. My advice is that all four of the industry associations that the honourable member mentions were invited to be part of the negotiations. I am advised that in mid-December the Housing Industry Association informed the minister that insofar as infrastructure schemes were concerned there were no amendments that would secure their support. The other three organisations have continued to be involved, and the Urban Development Institute's and the Property Council's views I put on the record earlier. In relation to the Master Builders Association, their primary focus, I am advised, has been on other issues with the builder that have since been addressed.

The Hon. D.W. RIDGWAY: I intend to ask a few questions around the basic scheme first, and then maybe go to the general scheme, and I think some of my colleagues have some questions around the basic scheme. Can you explain the basic scheme? Everybody is familiar with Mount Barker, so we will use Mount Barker. We have a greenfields development and, as we all know, the developer is required to do all the infrastructure inside the boundary of their development, so we are talking, I assume, about infrastructure that is required outside the boundary of an allotment that a developer is subdividing. I assume we are talking about infrastructure outside that allotment?

The Hon. K.J. MAHER: Yes, that is correct.

The Hon. D.W. RIDGWAY: So a planning process and a master plan will be done for an area. Does the minister envisage that there will be a set of works that is negotiated to be required? I am looking from a developer's point of view. If the government says, 'We actually need a stormwater drain of x capacity,' and the developer says, 'Actually, we don't think you need x; you need y capacity,' how do you come to that agreement, that the infrastructure we are potentially looking at funding is agreed and adequate and that the government of the day is not then expecting the developers to pay for gold-plated infrastructure?

The Hon. K.J. MAHER: I am advised the scheme envisages that a scheme coordinator will be appointed to ensure that infrastructure is fit for purpose and not overengineered or gold plated. So, there is a scheme coordinator to ensure that it is fit for purpose, in consultation with the developer and the council.

The Hon. D.W. RIDGWAY: I will refer to Mount Barker as a good example. When we are talking about infrastructure, does the government envisage that we will have third-party options for infrastructure? I remind members about Mount Barker, where I think it was wastewater treatment—I think SA Water had a scheme that was going to be very expensive and almost prohibitive, yet there was a private option to have a much cheaper and cost-effective scheme.

How is infrastructure viewed when we look at this particular piece of legislation? Will it be, for wastewater and the provision of fresh water, just SA Water? Will they still have their monopoly, or will there be other options available?

The Hon. K.J. MAHER: My advice is that it will be up to the scheme coordinator, in the circumstances of that particular scheme, to make sure that it is not over-engineered and not gold-plated, but is fit for the purpose which it needs to serve.

The Hon. D.W. RIDGWAY: What about the private supplier providers of infrastructure?

The Hon. K.J. MAHER: That could be contemplated; that would be up to the scheme coordinator.

The Hon. D.W. RIDGWAY: The scheme coordinator, I assume in negotiation with the landowners, arrives at a series of works that needs to be done and then a dollar value is put on those works. That is my assumption; the minister might like to confirm that. Will it be a per hectare charge or a per allotment charge? How will the actual infrastructure levy be apportioned?

In discussions the opposition has had, the Housing Industry Association believes it is a per allotment charge, whereas other organisations believe it is a per hectare charge. On one hand you can say, 'Well, a hectare will be cut up into a number of allotments,' but it seems to be that there are two different points of view in the industry as to exactly how this will be imposed upon the property owners.

The Hon. K.J. MAHER: My understanding is the scheme coordinator will set out the terms of the scheme and then depending, on the specific circumstances within that scheme, it will be up to the scheme coordinator to decide, in consultation with the developers and the council, how those charges will be apportioned.

The Hon. D.W. RIDGWAY: I just have a quick question about the scheme coordinator. Is there any review mechanism for a decision made by the scheme coordinator? I think we are getting another answer to the previous question.

The Hon. K.J. MAHER: My advice is that there is a mechanism to review a decision or make a decision. I assume the next question will be: what is it?

The Hon. D.G.E. HOOD: I just have a question to the minister about the coordinator. What department will they come from: is it someone from DPTI or is it someone from the commission? Ultimately, who do they report to? We put a lot of faith in this individual and they will be making some very significant decisions if it comes to arbitrating between two or more cases or two or more arguments. Who this person is ultimately responsible to could have a lot of bearing on the decisions they make, so to whom is it envisaged that this individual or this position would be ultimately responsible? Would it be to the planning minister, to the infrastructure minister, for example? How will it work?

The Hon. K.J. MAHER: I thank the Hon. Mr Hood for his question. My advice is that a scheme coordinator does not sit in a government department, and it may not be a public servant who is appointed. The scheme coordinator would ultimately report to, and be responsible to, the commission.

The Hon. M.C. PARNELL: On basic infrastructure, the Hon. David Ridgway invoked the memory of Mount Barker, and I think it is a good example. That was effectively a rezoning that was requested by a consortium of property developers. We found out, through freedom of information documents provided, that one of the promises the developers made was that they would pay for the new freeway interchange, the so-called Bald Hills Road Interchange.

In fact, there is an amount of correspondence addressed to former planning minister Holloway which effectively says, 'If you don't hurry up and rezone this land our ability to hold this consortium together and our ability to pay for the second freeway interchange will be compromised.' So it was fairly clear that this was the carrot the developers were holding out.

Since minister Rau took over the portfolio he has been quoted many times, in this place and elsewhere, as saying that there would be no more Mount Barkers on his watch. The context in which he said that was around infrastructure, so I absolutely appreciate that the government is now trying to fix the infrastructure issue. In a previous answer the minister has said that we are talking about infrastructure that is inside the boundary of the development, if you like, but also that is outside. We also know from proposed new clause 155A that roads are included.

It strikes me that the way this could work in practice—and I will get the minister to tell me whether I am on the money or not—is that if an area is designated as a growth area and the government, whether of its own volition or at the request of developers, is going to rezone from, say, farming to housing, then it would effectively become a condition of that rezoning that the developers either pay a sum of money into a pool to perhaps fund a new freeway interchange or maybe they could be required to fund the entire new freeway interchange.

My understanding of how this would work is that the government would effectively refuse to proceed with the rezoning of this land from farming to housing until it had people signed on the dotted line and had them committed to paying for infrastructure as agreed or as negotiated through the coordinator. Is that example a reasonable understanding of how this is expected to work?

The Hon. K.J. MAHER: My advice is, yes, that is possible; that is one of the events that could trigger it. If the person did not want to redevelop their land, or there was a scheme coordinator who had a scheme that was unacceptable, there is no compulsion on the landowner to develop that land. That is one of the possible avenues under this scheme for that to apply.

The Hon. M.C. PARNELL: I thank the minister for his answer because he did say early on that, if we take that example of rezoning land from farming to housing, if a farmer wants to keep farming, then there is absolutely nothing to stop them doing that. The fact that their farm has now been rezoned as a potential housing area, rezoned to residential, does not preclude them from farming because they have existing use rights. You are allowed to keep farming, even if your land has been rezoned from underneath you to housing.

The minister said earlier that in that case, if the farmer is in one of these designated growth areas, the farmer's land has been rezoned for housing but the farmer decides not to do anything, not to put in a subdivision application but simply to keep farming, there is no cost imposition on them at all until either they sell or they apply to subdivide.

The Hon. K.J. MAHER: This is reasonably complicated, so thank you for your patience. I am advised that in the example given, where a farmer who farms land and there is a rezoning, the scheme coordinator could come up with a charge for that farm, but that is not payable until the use of the land changes. For example (and this might be a further question), if the farmer sold the land, that charge remains on the land at a future time when any future owner changes the use of the land, but if the land use stayed the same the charge would not be incurred. I am getting lots of nods.

The Hon. M.C. PARNELL: The minister is correct: that is exactly where I was going with this. We will talk about these other infrastructure schemes later, the general schemes where you need to get agreement, but with these basic schemes you do not need to get agreement. The farmer might be terribly unhappy that the land is being rezoned at all. He does not really want anything to do with it, he just wants to grow broccoli. They are not obliged to agree to it.

From what the minister said, the farmer keeps growing broccoli, the land is rezoned from under them, it is rezoned as housing and, when they eventually retire and they decide to sell it, presumably they are going to get a lot more money than they would if it was zoned for farming. They are now going to get paid a residential price and, when the subsequent purchaser lodges an application to subdivide the broccoli farm for houses, that is when the charge would kick in. Just to clarify, is there a mechanism for putting a charge on the land or would it simply be the development application that triggers the payment of the charge with the subsequent owner?

The Hon. K.J. MAHER: As you have explained, that charge would not become payable until such time as that change in use occurred. There is provision for that charge to be registered against the title of that land. In that way it is not something that is an unknown to a purchaser coming in in the future.

The Hon. J.A. DARLEY: Can the minister confirm that, in connection with the charge that is not recoverable, that would be indexed until such time as the farmer decides to subdivide, and then the charge would be recoverable, plus the indexation?

The Hon. K.J. MAHER: Yes, I can confirm for the honourable member that that is correct.

The Hon. D.W. RIDGWAY: Just while we are on this theme, you could have a set of circumstances, minister, where there may be two or three parcels of land—and I guess we are all referring back to Mount Barker—where the owner wants to keep farming. While there is a charge, as the Hon. John Darley mentioned, against that land and the value is indexed, you could still have two or three parcels of land where the farmer carries on farming for the next 10 or 20 years and the actual contribution is not made.

You have talked about the Swiss cheese effect on Mount Barker that we have seen in the past; that still could happen. Although, ultimately, there would be a charge recoverable, there would still be no actual revenue to government to build the interchange until that land use has changed; is that correct?

The Hon. K.J. MAHER: The charge will not become payable. The trigger for that is the change in land use, yes.

The Hon. D.W. RIDGWAY: On the basic scheme, the Housing Industry Association believes that it will be charged as an annual payment on the land. Either the developer has to pay or a householder has to pay. Other groups seem to think it will be a one-off payment that will effectively, it has been put to us, reduce the value that the farmer would get. If it has been rezoned from farming land to residential, the per hectare charge would be discounted against the farmer's price. Can you explain whether it will be an annual payment over a period of time to pay for the infrastructure, or will it be an up-front payment that is most likely to be borne by the owner of the land, who obviously gets less for their land as a result?

The Hon. K.J. MAHER: If the honourable member could clarify it, in the example that we have been using, where the farmer sells the land and it is on-sold numerous times, is your question: once that change of use has occurred, triggering the payment of the charge, is the charge then fully payable there and then, or once that change of use subsequently happens is the charge then paid over a number of years?

The Hon. D.W. RIDGWAY: That is correct. Is the payment over time? The Housing Industry Association believes that it is an annual payment per allotment until the infrastructure is paid for. I want some clarity. Is that the case, or is it a one-off charge that effectively reduces the value of the land and the amount the farmer will get for his property?

The Hon. K.J. MAHER: I thank the honourable member for his question. The answer is that it is up to the terms of the scheme. The repayment will depend on the terms of the scheme, the amount to be paid each year and the length of time that goes is up to the terms of the scheme. In the example we have been given, it is a one-off charge and it will be known up-front, so someone who is going to buy the farmer's land to look to redevelop it in the future goes in with eyes wide open. They will know how much the charge is and they will know the terms over which it needs to be repaid.

The Hon. D.W. RIDGWAY: You said that it would be up to the scheme negotiation. You could have two options with what you are saying: you could have the up-front lump sum or you could have a negotiated scheme where it might be paid over time. Who is it paid to and who is it paid by? Is it the landowner or is it the property developer when they have subdivided it into an allotment but they have not sold it? What time frame is it over? Is it until the infrastructure is paid for or is it just an open charge?

The Hon. K.J. MAHER: I am advised that it is paid by the landowner. In terms of the time frame, that is up to the scheme that the scheme coordinator comes up with.

The Hon. D.W. RIDGWAY: But surely, minister, having a scheme coordinator to determine that it is 20 years to pay for the infrastructure, for example, that is certainly not what has been envisaged by the Urban Development Institute. I think you have two different versions of this scheme out there in the industry. What I am interested to know is, if it is to be paid over 20 years, for example, who it is paid to. Is it the local council that has done the work? Is it to state government that has done the work? Is it to a scheme fund that has done the work? It really is a bit grey. Will it be an annual charge? Will it be indexed with CPI? How does it all work?

The Hon. K.J. MAHER: I have some answers which I hope will inform the member in answer to his questions. I might put in a little more information because I suspect that there might be other questions in relation to this. It is the local government that collects the infrastructure charges and they are passed on to the state government to administer. If someone does not pay, that is not the local government's problem and it is up to the state government then to recover that money. I am informed that the local council can recover an administration fee for the collection of that charge.

The Hon. D.W. RIDGWAY: So local council will collect it whether it is a lump sum per hectare or whether it is an annual charge on a property. Can the minister confirm that the local council will collect both on behalf of the state government and then pay it to the state government? Is that what you were saying?

The Hon. K.J. MAHER: That is correct.

The Hon. D.W. RIDGWAY: I have just a couple of other questions in relation to this. It would seem that if it is a 20-year charge over a longer period of time then what the minister is talking about will really have no impact on reducing the cost of living and pressure on young families wanting to buy a home. However, I am interested to know how the government envisages council rates will be impacted by the fact—and we will use the farmer scenario because everybody is familiar with that—that it has been rezoned. He or she continues to farm, but it clearly has a much higher value as an endpoint.

Can the minister guarantee that the farmer will not be paying exorbitant council rates and his property will not be valued by the Valuer-General and, of course, council rates set accordingly because of the fact that his property has a much higher value even if they intend to keep farming?

The CHAIR: Any contribution that might help would be appreciated.

The Hon. J.A. DARLEY: If the land is still farmed, it has to be valued as farming land even though it has been rezoned.

The Hon. K.J. MAHER: I thank the Hon. John Darley for his guidance and significant wisdom on matters to do with the valuation of land. I have been informed that the valuation is on the use of the land. It is not until the change of use occurs that you would see that valuation differ.

The Hon. J.A. DARLEY: The reference is section 22A of the Valuation of Land Act.

The Hon. R.I. LUCAS: I have some questions that were prompted by the questions that the Hon. Mr Hood raised, but before I return to those can I just clarify an issue in relation to this. We have talked about examples where the seller of the land is the farmer farming broccoli in Mount Barker, but in a significant number of cases, I assume, the owner of the land is actually Renewal SA. It is the government who owns significant tracks of land awaiting to be rezoned and to be developed.

I am going on memory, but I think someone once quoted to me that 60 or 70 per cent or something of the land was held by the government. I do not know whether that is correct or not. It is clearly a significant amount. How does this proposed scheme and its levy arrangements work when it is, I assume, if one follows the logic of what I have been listening to about the broccoli farmer in Mount Barker, a charge levied against another government agency, that is, Renewal SA? Does it necessarily mean that Renewal SA is paying the infrastructure levy charge and its return, and therefore its return to government, is lessened through this arrangement; that is, Renewal SA is paying instead of the broccoli farmer?

The Hon. K.J. Maher interjecting:

The Hon. R.I. LUCAS: It is the same example; that is, the land that is being developed was not previously held by a broccoli farmer: it was previously held by a government agency. How does this scheme work or is proposed to work in relation to that?

The Hon. K.J. MAHER: My advice in relation to the question is it potentially could be levied against government-owned land, but it is unlikely that it would be.

The Hon. R.I. LUCAS: I do not wish to delay the debate at this stage because I know significant sections of this are going to be recommitted, and I suspect this is one of the contentious areas. It may be another area that is recommitted at another stage, so I am just wondering whether, through the minister in charge here, it is possible to take on notice and seek further information as to how this would apply.

Certainly, it has been put to me that this, the way it is drafted, would apply to government-owned land; that is, Renewal SA or whatever it might happen to be. That is why I have asked the question. The minister says, 'It could, but it's unlikely to,' or whatever it is. I am just wondering whether he could take it on notice and we can get advice from the department or the planning minister as to what circumstances it would apply in and, in those circumstances, how it would apply.

The Hon. K.J. MAHER: I might be able to answer that question now but, if not, I am happy for the honourable member to let me know, and I can come back and bring further information. I am advised that an answer to that is that the minister does not have to initiate a scheme. So, if the minister did not initiate a scheme, then the scheme would not start and there would not be the charges for the infrastructure scheme that are there. If that does not fully answer the question, I am happy to go away and get some more information for the honourable member.

The Hon. R.I. LUCAS: So, this minister is saying that this is a decision somewhere where the minister makes a decision to initiate the scheme. In those circumstances, if a scheme is not initiated, how is the infrastructure paid for?

The Hon. K.J. MAHER: I am advised, in the ordinary, normal way, out of the budget.

The Hon. R.I. LUCAS: So, as under the existing arrangements?

The Hon. K.J. Maher interjecting:

The Hon. R.I. LUCAS: Alright. I will reflect on that and take further advice if I need to. I am sure I can pursue it when the clauses are recommitted. My question, which follows on from the questions from the Hon. Mr Hood and others, is in relation to the scheme coordinator. The minister, on advice, in response to the question from the Hon. Mr Hood of, 'To whom does the scheme coordinator report?' said, 'To the commission.'

I just want to refer the minister and his advisers to clause 157—Scheme coordinator, which states that the chief executive is the person who appoints a person to act as the scheme coordinator. Under subclause (2), the chief executive can replace the person appointed under that subsection from time to time, as the chief executive sees fit. So, whoever is the chief executive appoints the scheme coordinator and can sack him or her and replace the scheme coordinator.

Under the definitional clauses, the chief executive is the chief executive of the department, and the department is the administrative unit of the Public Service that is responsible to the minister in the administration of the act—which to me is DPTI—so it would appear that the chief executive of the planning minister's department is the person who has the capacity to hire and fire the scheme coordinators. If the chief executive of the planning department is unhappy with what the scheme coordinator is doing, he can get rid of the scheme coordinator and put someone else in.

It would appear to be entirely possible that the scheme coordinator could appoint someone within the department to do it. I think the minister is right that it does not have to be, but it could be a public servant who is answerable to the chief executive of the department who could be appointed as the scheme coordinator. I just want to ask the minister to clarify on what basis he is saying that in essence the independent commission is in charge of the scheme coordinator arrangement as opposed to the chief executive of the department.

The Hon. K.J. MAHER: I think this may be of assistance to the honourable member: we have not got to it yet, but government amendment No. 63 puts a subclause (5) in clause 157. The government amendment No. 63 will become 157(5): 'The Chief Executive must, in exercising a power under this section, act with the concurrence of the Commission.' In that respect, the chief executive has to act with the concurrence of the commission under the amendment that we will move to clause 157.

The Hon. D.W. RIDGWAY: I have some questions in relation to the general scheme. My understanding of the general scheme is that it is, if you like, brownfields or existing; it is not a greenfield site. It is an existing part of the urban infrastructure. The minister told us that there had to be 100 per cent agreement by affected landowners. I have a range of questions around this. If there is not 100 per cent agreement—there is 99 per cent; Mrs Ridgway says, 'I don't want to go ahead with it'—does that mean that nothing happens because out of, let us say, 1,000 affected landowners, 999 say yes and one says no? Does that mean that nothing progresses?

The Hon. K.J. MAHER: If Mrs Ridgway says no, then nothing happens later.

The Hon. D.W. RIDGWAY: Let's just keep moving on. You did talk about this levy being used for a range of projects to improve the streetscape and you cited some examples of parks that had been developed. We currently have an open space levy that is payable on developments. Under this proposed legislation, how will the open space levy be used? It is already collected by government in relation to public realm and public infrastructure of, if you like, a cosmetic nature, whether it is just streetscape or a park; not a tram or a big bit of infrastructure, but minor beautification.

The Hon. K.J. MAHER: I am advised that in relation to the open space contribution, those one-off contributions for one particular land use will remain. The general scheme envisages larger developments where 100 per cent of landowners agree that they want the benefit of that scheme.

The Hon. D.W. RIDGWAY: Minister, I think you might have missed the point. We currently have the open space levy collected—or the urban development fund; is that what it is called?

The Hon. K.J. MAHER: Open space.

The Hon. D.W. RIDGWAY: The open space fund—we know what we are talking about. So, that will not change? Will that still be used for streetscapes and the public realm, rather than this particular levy?

The Hon. K.J. MAHER: I hope this provides some clarity. With what we are referring to as the open space scheme, an individual contributes to provide open space or monetary compensation in lieu into a fund allocated. For the general infrastructure contribution contemplated under the bill that we are now debating, it goes to particular identified local infrastructure.

The Hon. D.W. RIDGWAY: It probably will not be used for some new park benches or some small items; it will be significant local infrastructure projects, I would assume?

The Hon. K.J. MAHER: My advice is that you probably would not go to the trouble of doing a general infrastructure scheme for a couple of park benches, but it is whatever the general infrastructure that 100 per cent of that group of people agree to be part of that fund.

The Hon. D.W. RIDGWAY: I do not want to dwell on the small stuff, but if we have a scheme coordinator in basic infrastructure who determines that an upgrade of the streetscape is a project worth funding by having a 100 per cent buy-in from all of the residents?

The Hon. K.J. MAHER: In the general open space?

The Hon. D.W. RIDGWAY: Yes, in the general one. Who would determine it? Is there a scheme coordinator, or is it local council? Who determines it, and who is the money paid to?

The Hon. K.J. MAHER: I have advice that the coordinator for the scheme for both the basic and general would be the same scheme coordinator, but for the general infrastructure scheme it would have to 100 per cent agreement of those who contribute to it. In terms of who collects it, it would be the same mechanism for collections through local councils as with the basic infrastructure scheme, with the same scheme coordinator.

The Hon. D.W. RIDGWAY: Just for clarification, is the same person the scheme coordinator for every scheme, or is it a scheme coordinator for each particular scheme?

The Hon. K.J. MAHER: A scheme coordinator for each particular scheme.

The Hon. D.W. RIDGWAY: I am interested in talking more broadly about the public infrastructure, and I will use a tramline down a main road as—

The Hon. M.C. Parnell: Prospect Road.

The Hon. D.W. RIDGWAY: Well, it may be Prospect Road or it may be Unley Road or The Parade, maybe Henley Beach. I think the government has one planned to go out to the marginal seat of Colton to try to pork-barrel that electorate later on this year or next year. However, in my time as a shadow transport minister there was a sort of formula that people will walk within 800 metres of a tram stop; beyond that they think, 'Well, I'll get in my car; it's too far to walk.'

If you have a tram going down a road, and if you can get 100 per cent of the community to buy in, who pays what proportion? Clearly, if you are on the road frontage you have public transport at your front door, or if you have a shop or a hotel more and more people are going to be available at your front door. If you are 800 metres away and it is marginal whether you will actually ever use the tram, what portion of the uplift is apportioned to your property? Again, is it over the same length of time? I am interested to know how that will be dealt with under this legislation.

The Hon. K.J. MAHER: My advice is that it would be up to the terms of the scheme. The bill will not provide for every possible permutation or combination of what people might agree to. However, it would require 100 per cent agreement, in the example you gave, of all those involved in the scheme. It would be those individuals who are contributing to the scheme who would have to find the mechanism for their contributions that would satisfy everyone in that scheme.

The Hon. D.W. RIDGWAY: I think the minister has missed my point. I used public transport as an example. I think the Hon. Mark Parnell might be able to correct me, but I think 800 metres is the distance—

The Hon. M.C. Parnell: The catchment.

The Hon. D.W. RIDGWAY: The catchment for a tram station. Who determines the percentage? Let us assume everyone agrees; how far out do you go? Do you go the full 800 metres, and at 801 metres you do not pay but at 799 metres you do pay? It has been very simplistic, this view of, 'Well, we'll run a bit of public infrastructure and it will be all those who get an uplift on the road frontage.' That will potentially be developers or sites that will go to higher density residential, but there will be a benefit (if you see the provision of public transport as a benefit) for people spreading out up to 800 metres from a tram station. I am interested to know how the government views how those people will be treated by this legislation. Will all those who will be getting some uplift in value of property be expected to pay?

The Hon. K.J. MAHER: My advice is: yes, it would be up to the scheme coordinator to decide the contribution area, but people would have to agree to that. In terms of a differential payment, depending on the benefit, clause 168(4) allows for differing rates to be imposed. Again, there would have to be 100 per cent agreement from all those who are part of the scheme, and whatever differing rates were needed to reach such an agreement that were possible.

The Hon. D.W. RIDGWAY: At a recent UDIA lunch, minister Mullighan was speaking, and he referred to the value capture models that we are talking about here. What he spoke of at the Urban Development Institute lunch was that with a bit of public infrastructure—and we used the example of the tramline that was put down a roadway—there would be an uplift in property value because they had this public infrastructure. He indicated to the Urban Development Institute that that would be simply captured by council rates: the value of properties go up, so council rates could capture that money.

The minister also indicated at the lunch that—and we will use the example of Prospect council given Mark Parnell's comments about Prospect Road—if the council decided to invest in some public transport infrastructure they could fund their component of the capital cost by servicing it from the uplift in council rates they would receive as the local council. That is certainly not a voluntary scheme with people buying; it was a scheme where he believed it was possible that it would automatically happen by the fact that council rates would go up.

I use the example of Mrs Ridgway again: she would not have any choice because her land valuation would go up and therefore she would have to pay an increase in council rates. While it might not be paying for the whole scheme, it would be paying for a local government contribution. I am interested to know the minister's view or the government's view on what minister Mullighan was saying because it certainly has not been canvassed with the opposition that it would be an uplift in council rates, with councils and local government then helping fund this infrastructure.

The Hon. K.J. MAHER: I can inform the honourable member that is not how the scheme that has been put forward here would operate.

The Hon. D.W. RIDGWAY: I will endeavour to get a transcript of what minister Mullighan said. I think we need some explanation in this place as to why you would have a senior minister at an industry lunch, which is one of the groups that has agreed, so the minister claims, on the basic infrastructure. I think minister Mullighan was using speaking notes.

Most ministers, I would expect, at industry functions like that would be speaking from a script so that they do not perhaps stray from that script. I am sure we are not going to complete the debate today, but I would be very keen to have a copy of minister Mullighan's speech tabled in this chamber in relation to that particular aspect because there were a few hundred people there, and I am certain that is what he said.

The Hon. K.J. MAHER: I am happy to pass those comments on to the Minister for Transport.

The Hon. M.C. PARNELL: At the risk of overegging this pudding, part of the difficulty for me is that the example that has been used of the tram strikes me as one of the most unlikely examples to work. The reason I say that is that you have this concept called a 'contribution area', the area within which people have to contribute—and presumably this is the area within which everyone has to agree to contribute. When calculating the contribution area, you have to take into account the area that will benefit from the infrastructure.

In regard to the Hon. David Ridgway's catchment for a train or tram, yes, they might benefit, but you will get people who live right next door to the proposed infrastructure and they are not going to use it in a pink fit—they do not like it and they do not want it to go ahead. Even if it is going to increase the value of their property, you have people who are pig-headed and they will just say no.

It strikes me that the more ambitious you are the less likely you are of actually getting agreement. I would have thought that the real use of this general infrastructure scheme will be smaller, localised infrastructure projects with fewer players involved because that increases the chance of getting 100 per cent agreement. Does the minister agree that something like a tram extension is unlikely to be caught by this simply because of the logistics of having to get too many people to agree?

The Hon. K.J. MAHER: I will take that more as a comment than a question but, yes, obviously when you have more parties to seek agreement from there are more views and it may be more difficult.

The Hon. D.W. RIDGWAY: I will also make a comment, if I may, Mr Acting Chair. The minister, in his opening remarks around these particular amendments, talked about value capture models elsewhere in the world. They have been primarily around big upgrades to the public realm, public transport or waterfront redevelopment; they have been significant bits of infrastructure. While he gave those overseas examples, that is I think clearly what the government envisages, that this mechanism will be for significant infrastructure projects.

Putting aside whether minister Mullighan's view about council rates is accurate, that is certainly minister Mullighan's view, that this could be used for public transport and, in particular, tram extensions. We know the federal government has some appetite for trams, and so of course I expect the government is saying, 'The feds have some money. We'll have a little bit of money if we can leverage some out of local government.' I expect that was where minister Mullighan was heading. I think it is the government's intention to look at funding significant parts of their tram network through this model.

The Hon. M.C. PARNELL: Again, I will make an observation because, whilst I can see that there are difficulties with the use of this scheme for the grand projects that the government has in mind, I also appreciate that there are some ways out as well. For example, there is the ability to excuse anyone from having to pay any contribution: there can be rebates and waivers.

I do not know whether the minister will be able to answer this question, but my assumption would be that if you are not requiring anyone to pay you do not require them to have to consent, which means that you could in fact have a system which is, 'Hands up who wants to pay for this infrastructure,' and a range of hands will go up and those people will pay and those who do not want to pay for it might be exempted.

The point I am making is that, whilst I can see that there are some practical difficulties—and it may well be that it turns out to be less workable than the government had in mind, but that is something for fixing up at a later date—I put on the record now that the Greens are inclined to give these infrastructure schemes (both the essential infrastructure and the general infrastructure schemes) a chance to work and so we will be supporting of these schemes.

But I do just raise some doubts that I think the government may, in negotiating a settlement for the general schemes, have made it very difficult, if not impossible, for many of them to work. In some ways, it could be like building upgrade agreements in New South Wales that seemed a great idea but I think hardly anyone ever took them up because they were made too difficult to work. It is not a reason to oppose what the government is putting forward, but it is perhaps a reason to revisit it if it turns out to be too difficult and unworkable.

I think the principle is sound, the principle that we need to find new ways of funding infrastructure so that it does not just rely on ratepayers and taxpayers and in fact catches some of the uplift in value that has otherwise just been capital gains for people. The principle I think is sound, and I would urge the government to look carefully at how it operates and come back to us in a year or so if it turns out not to be working properly.

I just want to put on the record now that the Greens will be supporting both these infrastructure schemes in general. We will have a look at some of the detailed amendments when we get to them, but in principle we are supportive.

The Hon. D.W. RIDGWAY: Maybe it is time for the opposition to put our position. We are not convinced that the government has got this right. If we look at the basic infrastructure scheme, we have had consultation with senior people from industry groups who had a view that it was just a lump sum, paid once, and that there was no ongoing annual charge. We have had other members in the industry saying that it is an ongoing annual charge over a period of time, but the minister today has not been able to tell us whether that is just to fund the scheme. It may be there to fund ongoing maintenance.

In the basic infrastructure scheme, we are not convinced that the government has articulated to industry exactly what it wants. In the general scheme, all the conversation—and I have had some indication from industry players via text message this afternoon—is that you will never get up any big projects, yet all the conversation has been about value capture and uplift. I reiterate what minister Mullighan was saying in the last couple of weeks at the Urban Development Institute about public transport infrastructure.

There is no clarity around exactly what we are talking about. If it is about public transport or any significant capital investment, there will never be 100 per cent agreement, no matter what project. If you had 10 people, you probably still would not get 100 per cent agreement. I cannot understand how workable it will be if you are expecting 100 per cent agreement, especially if it is an uplift in value or an improvement to public infrastructure that has an impact beyond the streets that face it. If it is the two or three rows of houses behind or two or three streets behind, while the minister says there is a mechanism to apportion it, is it just until the infrastructure is paid for? Is there ongoing maintenance? Are there ongoing upgrades? Who pays for what and over what time?

I suspect there is some level of interest in exploring it from the opposition, but it was always very complex. Our leader and shadow minister, when it was first introduced, explained to the minister that it was way too complex and maybe should be put aside from the general reforms that we have been looking at in this legislation. I indicate tonight that the opposition will not be supporting amendment No. 50, which inserts new clauses 155A and 155B.

The Hon. D.G.E. HOOD: I rise to indicate Family First's position on this general issue, as that is what both the Greens and the Liberal Party have done. It will come as no surprise to members of this chamber, as our public comments have pre-empted this, that we also will not support the attempt to introduce this new infrastructure levy scheme or schemes. The reason for that in its simplest form is as the Hon. Mr Ridgway just put.

I make no criticism of this minister: I think he has done a pretty good job with this bill over the several weeks we have been debating it. It is a topic for another day, but perhaps it is a weakness of our system that we do not have the minister actually responsible for the bill who could answer these things, or at least the intent of these things, with specific detail. It very much up in the air.

Some of the questions that have been put have been quite legitimate questions, and it seems that the government is still working through its own position on some of these things; they do not quite know how it will work yet. Again, I make no criticism of this minister on that issue—it is not his portfolio—but, for this chamber to pass what is a very significant change to our current system into law, I am going to need some better answers.

The fundamental point the Hon. Mr Ridgway raised is the crucial one, and that is: how do we get to a position where 100 per cent is required to fund anything because that will almost result in nothing being funded, or nothing will be funded by volunteers anyway? The Hon. Mr Parnell's position was also valid when he said, 'Who wants to pay for this infrastructure?' as a hypothetical question, and that you will see the hands go up. There may be some hands, but the incentive is not to stick up your hand if you know that it can go ahead anyway and you do not have to pay anything. That is the first fundamental question: who really pays and how do you get anything off the ground?

The second issue—again the Hon. Mr Ridgway raised the issue—is something that has been swirling around in my mind on this topic for months now, and that is: where are the boundaries drawn? I think we heard about 800 metres for example in the case of a tram or train or something.

Whatever the project, there is an area by which people will directly benefit presumably, but who decides how big that area is and on what basis? Is this house in and that house out, this shop is in and that shop is out? It is inherently arbitrary and I think we need a lot more work on this before we can have a level of satisfaction, certainly for me, in order to support something like that.

The final point that also reinforces our position or has helped us formulate our position is that the industry is not yet agreed on this. Yes, as the minister pointed out, there are a couple of the four industry bodies that are in agreement, but certainly the HIA seems to be intractably opposed and the MBA also has some very serious concerns. We cannot support it at this stage. I think there is merit in the government's thinking but we have a long way to go before we are in a position where we can support it and pass it.

The Hon. J.A. DARLEY: I will be supporting these amendments in principle mainly because, with the second scheme, it does require 100 per cent agreement by everyone and I think that is impossible, although I was told by the Property Council that there was a situation where five owners wanted a piece of infrastructure and they all agreed.

I have to comment on minister Mullighan's comments because if he thinks that he can determine a significant and detectable increase in uplift in property values, well, I think his talents are wasted: he should be appointed Valuer-General.

The Hon. K.J. MAHER: I thank honourable members for their contributions on the infrastructure schemes. I accept the contributions, particularly those from the Hon. David Ridgway, the Hon. Mark Parnell and also the Hon. Dennis Hood about the inherent difficulties in getting 100 per cent of people to agree to a scheme such as this. Even a small number may present some difficulties. Obviously, if it was a large number of people the merits of the proposal would have to be very significant in order to get agreement.

I wonder if I could ask the Leader of the Opposition: given the outline of the difficulty of getting 100 per cent agreement, is there a figure that he thinks would be a better figure, rather than 100 per cent agreement, to make it more workable?

The Hon. D.W. RIDGWAY: I did not think I would have to answer questions; maybe it is a practice. We have been guided by industry. Industry has negotiated with you to get 100 per cent—I understand the Property Council and others—the government has come to 100 per cent. You have an army, and a small group of that army is here this afternoon advising you; you have all the experts and we have a couple of staff. We have been guided by consultation and the interaction we had with the industry and they have said, 'Well, we're happy with 100 per cent.'

That may well be because the industry does not think it will ever get off the ground and it will only be used for tiny projects and there will be no big projects. It is interesting that a lot of the conversation has been around value capture, especially for this general scheme and the uplift that will happen because of investment in public infrastructure. I am sure you are not going to get huge value capture or uplift from a couple of new park benches, a bit of grass and a couple of trees. Surely what minister Rau has been talking about is significant uplift from significant investment.

I do not have a figure, but certainly it is the industry that has come to us and said, 'We're happy with 100 per cent.' We are yet to be convinced because of the inability to explain exactly how the charge per allotment will be levied as against whether it is the street frontages, as I talked about, or the tram station. There is a whole range of permutations that will come out of it that I do not think we are across yet and that is why we are opposed to where we are today. We have said very clearly that we may have had some appetite early in the piece but it really is not clear.

This is an important piece of legislation, probably one of the most important pieces that will pass the parliament in this four-year period and we do not want to be back here—and it will not be back here in the next year or so. I think when the Hon. Mark Parnell said 'back here next year' I can guarantee that we will not be back here next year.

I think it was the adviser who has gone to Brisbane, Stuart Moseley, who, in a briefing with our team early in the piece when the minister said, 'It might be a couple of years before we draft all the regulations and codes,' said, 'Minister, it will be at least three, if not four, years.' I expect it will be somewhere in the middle of the next term of parliament that we will say, 'Hang on, there are some mistakes and problems with it.' Of course, we also know that there is another piece of legislation that we are likely to see some time this year that comes off the back of this bill as well.

It has been an interesting journey but, nonetheless, I thank the minister for his question. I have probably been a bit longwinded in my answer. We have been guided by industry. Industry says, 'We are happy with 100 per cent.' We are not convinced that this is the right mechanism and that is why we are not going to be supporting it.

The committee divided on the new clauses:

Ayes 10

Noes 9

Majority 1

AYES
Darley, J.A.	Franks, T.A.	Gago, G.E.
Gazzola, J.M.	Hunter, I.K.	Kandelaars, G.A.
Maher, K.J. (teller)	Malinauskas, P.	Parnell, M.C.
Vincent, K.L.

NOES
Brokenshire, R.L.	Dawkins, J.S.L.	Hood, D.G.E.
Lee, J.S.	Lucas, R.I.	McLachlan, A.L.
Ridgway, D.W. (teller)	Stephens, T.J.	Wade, S.G.

PAIRS
Ngo, T.T.	Lensink, J.M.A.

New clauses thus inserted.

The ACTING CHAIR (Hon. G.A. Kandelaars): Amendment No. 51 of the minister is seen as consequential; therefore, I do not propose to put it to a vote as it is just a heading.

Clause 156.

The Hon. D.W. RIDGWAY: There is a whole range of amendments (set 3) filed in my name that would remove the infrastructure scheme but, given that the chamber has just supported the infrastructure scheme by virtue of the fact of supporting those two amendments of the minister's, I will not be moving any of [Ridgway-3]. It is a futile exercise.

The Hon. K.J. MAHER: I move:

Amendment No 52 [Emp–4]—

Page 134, lines 8 to 11—Delete subclause (3) and substitute:

(3) Subject to subsection (3a), a proposal to proceed under this section may be initiated—

(a) on the Minister's own initiative; or

(b) at the request of another person or body interested in the provision or delivery of infrastructure.

(3a) The Minister may only act under this section on the advice of the Commission.

(3b) The Commission must, in providing advice under this section, take into account any relevant state planning policy and regional plan, and the relevant provisions of the Planning and Design Code (subject to any relevant amendments that might be made in connection with potential or proposed development that is to be undertaken as part of, or in connection with, the scheme).

This amendment provides that an infrastructure scheme may be initiated on the minister's own initiative or at the request of another person or body. The advice of the commission is required before the minister can instigate a scheme. Subclause (3b) also requires the commission to take into account relevant planning policies, regional plans and the planning and design code when providing advice to the chief executive.

The Hon. D.W. RIDGWAY: There is a range of amendments right through from amendments Nos 89 to 92 that the minister will move. While they are not strictly all consequential, we are not going to support them but we will not be dividing on them. We have made our view clear on the infrastructure schemes. We do not support them, but we will not be dividing.

The Hon. D.G.E. HOOD: Just to agree with the Hon. Mr Ridgway, we do not support them either, but we obviously will not be dividing.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 53 [Emp–4]—

Page 134, after line 31—Insert:

(4a) In giving consideration to the nature and intended scope of infrastructure under a scheme, the Minister must seek to facilitate the provision of infrastructure that is—

(a) fit for purpose; and

(b) capable of adaptation as standards or technology change over time (insofar as is reasonably practicable or appropriate in the circumstances); and

(c) capable of augmentation or extension to accommodate growth or changing circumstances over time (insofar as is reasonably practicable or appropriate in the circumstances); and

(e) designed and built to a standard that is appropriate taking into account the nature and extent of development that is proposed to be undertaken as part of, or in connection with, the scheme; and

(f) capable of being procured and delivered in a timely manner to facilitate and promote orderly and economic development.

Clause 156(4)(a) inserts a requirement that in preparing a draft outline for a general infrastructure scheme the minister must ensure that the proposed infrastructure is fit for purpose, built to a standard and also capable of being updated to standards or technology change or added or extended as needs over time evolve. It must also be procured and delivered in a manner which promotes orderly and economic development.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 54 [Emp–4]—

Page 134, after line 35—Insert:

(ab) the extent to which the implementation of the scheme will have an impact on any council (including on account of any infrastructure or other assets that might be transferred to the council when the scheme has been completed) after taking into account any submissions made by the council under subsection (7); and

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 55 [Emp–4]—

Page 134, line 38—Delete 'and amenity' and substitute 'or amenity'

It is a technical amendment correcting a drafting matter.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 56 [Emp–4]—

Page 135, line 2—After 'contributions' insert:

through the imposition of a charge under Subdivision 3 by the relevant council

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 57 [Emp–4]—

Page 135, after line 15—Insert:

(6a) The Minister must, in considering a scheme under this Subdivision, apply the principle that a scheme that relates to, or includes, basic infrastructure and is more suited to a scheme under Subdivision A2 should not be initiated under this Subdivision.

(6b) However, nothing in subsection (6a) (or Subdivision A2) prevents a contribution being sought with respect to basic infrastructure under Subdivision 3 insofar as it is considered by the Minister to be reasonable that owners of land within a contribution area (and outside a designated growth area) should make a contribution towards the cost of that basic infrastructure.

I will be very brief. Clause 156(6a) provides safeguard against inappropriate use of the general infrastructure scheme, where the provision of infrastructure better suited to the basic scheme, and the minister must take this into account.

Amendment carried.

The Hon. D.W. RIDGWAY: I would like to ask a question about amendment No. 57. This is clause 156(6)(b). Subclause (6)(a) says 'the area or areas which will benefit from any infrastructure or works to be provided or undertaken under the proposed scheme'. Then subclause (6)(b) states:

the extent to which it may be possible for contributions towards the costs of the scheme to be equitably proportioned between potential beneficiaries…

Can the minister explain exactly what that means?

The Hon. K.J. MAHER: Clause 156(6)(b) enables landowners who are not within a designated growth area to be subject to a contribution charge for the cost of that basic infrastructure where they will derive a benefit from it.

The Hon. D.W. RIDGWAY: It just raises a question which I did not ask earlier. I will use the example of the open space levy or the urban development fund or whatever it is called. It is not required to be spent in the vicinity of where it is raised, so you could make a contribution in one suburb and the government of the day could make a payment to a project that qualifies under the guidelines of the urban development fund—

The Hon. K.J. Maher: Under the current open space.

The Hon. D.W. RIDGWAY: The current open space one. I think there is a committee or a panel that makes those decisions; nonetheless, it can be spent elsewhere from where it is collected. I just wonder, with what the government is imposing today, whether the minister can give us a guarantee. We are talking about landowners who are outside the designated area, so I assume that is the designated growth area, whether it be a greenfield subdivision or even in the general scheme.

You are talking about capturing value from people outside the designated area. In what circumstances would you capture payment from somebody who is not affected by it? Also, what guarantee have the people who pay the levy that it will always be spent on their particular projects, and what is the time frame? Is it when infrastructure is paid for? If we are talking about an annual charge, which of course the minister talked about, will the charge cease when the infrastructure is paid for?

The Hon. K.J. MAHER: I think at least one of the questions was: how can we be sure this will be limited to someone who derives a benefit from this, unlike the example given with the open spaces scheme where it can be applied to other areas of the state that are not directly related? My advice is that clause 156(6)(b) of the bill, as opposed to new clause 156(6b), in giving consideration to the establishment of a contribution under this section, consideration must be given to:

The extent to which it may be possible for contributions towards the costs of the scheme to be equitably proportioned between potential beneficiaries…

My advice is that that would make sure that there is benefit being provided.

The Hon. D.W. RIDGWAY: In your amendment, the new subclause after line 15, which is new subclause (6b), provides:

…considered by the Minister to be reasonable that owners of land within a contribution area (and outside a designated growth area) should make a contribution towards the cost of that basic infrastructure.

My interpretation of that, and correct me if I am wrong—we will come back to the farmer, which has been rezoned.

The Hon. K.J. Maher: And Mrs Ridgway again?

The Hon. D.W. RIDGWAY: No, we will leave Mrs Ridgway out of it at this stage. We have the farmer's land, and he still continues to farm, but the two properties either side have decided to subdivide. However, they are in a designated growth area, so when the farmer changes his land use that will trigger the payment of whatever the fee is. If you are outside the designated growth area, what mechanism is used with the amendment that has passed? For example, where it states 'considered by the Minister to be reasonable that owners of land within a contribution area', I am not sure what a contribution area is, so I would like some clarification on that. Then what exactly do you mean by '(and outside a designated growth area) should make a contribution towards the cost of that basic infrastructure'?

The Hon. K.J. MAHER: We might have been overcomplicating it a bit. This is in relation to providing basic infrastructure but under a general scheme. Under this part to which these amendments refer it is a general scheme. You would have to have 100 per cent agreement and, if it is under the general scheme, then you want to be levied outside that area providing basic infrastructure under the general scheme would also have to agree to it. The answer to the mechanism would to be to have those people agree to it.

The Hon. D.W. RIDGWAY: You are talking about owners of the land within a contribution area, so you are talking inside a general scheme?

The Hon. K.J. MAHER: A general scheme, yes.

The Hon. D.W. RIDGWAY: But then outside a designated growth area, so you are envisaging a designated growth area surrounded by a general scheme?

The Hon. K.J. MAHER: A designated growth area is basic infrastructure.

The Hon. D.W. RIDGWAY: So a designated growth area is basic infrastructure and the general scheme is the broader public realm stuff, but you are actually layering one across the top of the other. That is what you are appearing to do from this amendment.

The Hon. K.J. MAHER: This contemplates the possibility of supplying some basic infrastructure under a general scheme. It would require that 100 per cent consent from those in that scheme.

The Hon. R.I. LUCAS: Given this is all under clause 156—Initiation of scheme, can the minister indicate how this is limited only to what he is referring to as the general scheme. Which particular clause here limits it only to this sort of example, and does not apply to the sort of example we were talking about earlier—I do not know the technical terms, but what I would call the greenfield development at Mount Barker, the broccoli growing examples that we were talking about earlier under clause 156?

Progress reported; committee to sit again.

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